Glossary · Your money in the deal
Cash value
In short
This is the savings component of certain permanent life insurance policies, like whole life or universal life. It grows tax-deferred and can be accessed by the policyholder during their lifetime.
What it means in a deal
Lenders may accept the cash value of a life insurance policy as part of your equity injection, provided it's "unencumbered." They will require documentation of the cash value and potentially an assignment of the policy as collateral. Ensure you understand how accessing or pledging this value impacts your policy's death benefit and future premiums.
Related terms
Common questions about Cash value
- How does the SBA verify the value of an equity injection consisting of non-cash assets, like equipment?
- Can personal retirement accounts or life insurance cash values be used as collateral if business assets are insufficient?
- Can a lender rely on a universal life insurance policy that has a cash value for a collateral assignment on a 7(a) loan?
- What if the primary business assets are specialized machinery with limited resale value?
- How does the SBA evaluate the value of contributed equipment for equity injection?
- Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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